A Study On The Relationship Of Governmental S&T Investment And Technological Innovation

With the booming of the knowledge-based economy and information-basedeconomy in the world, science and technology is playing an increasing role in theeconomic development and social progress. In order to obtain first-mover advantage oftechnological innovation, most governments take all kinds of measures to increase theirtechnology spending to encourage enterprise to increase investment in technologicalinnovation, accelerate economic development and improve the country’s overallcompetitiveness. However, it is easy to result in market failure, since the scienceinnovation products have the properties of externality，uncertainty etc. It is necessary forgovernments to intervene the innovation field to solve the problems and encourageenterprises to increase their innovation investments. Yet the government’s S&Tinvestment may also have a negative side, for example, it may reduce the enterprisesthemselves’ innovation investments.China is still in the early stages of technologicalinnovation, enterprises haven’t clearly realized their dominant position in technologicalinnovation so that their innovation momentum is not strong. As China is in thetransition period, there are various of economic elements. Enterprises of differentownership have different reactions to the government’s financial investment. Therefore,to study the effects of government’s S&T investment to different ownership have itsrealistic significance.Based on the above background and the former research, this paper made apresentation of related concept and theories about technological innovation andanalyzed the necessity of government’s S&T investments. From Grossman-He1pman’squality ladder model,we got the balanced innovation density of enterprises. We thenintroduced the government’s S&T investment into the model and analyzed themechanism of the impact of government S&T investment. Then analyzed the differentresponses to government’s fund due to different ownerships.In the empirical part, thispaper used extended Cobb-Douglas production function to lead to technologicalinnovation output model, from innovation input and output two aspect, usingstate-owned and non-state-owned two sets panel data of high-tech industry, to analyzethe effect of government’s innovation investment to enterprises of different ownerships.The main conclusions are: whether from innovation input or innovation output perspective, government’s S&T investment have a remarkable incentive effect forstate-owned enterprises but not remarkable for non-state-owned enterprises. Althoughgovernment’s S&T investment can effectively encourage the state-owned enterprises’increase their own innovation investment, the total investment of state-ownedenterprises is still much lower than non-state-owned enterprises’. It is illustratedstated-owned enterprise is very inadequate of intrinsic motivation to innovation so theyhighly depended on the government’s fund, yet non-state-owned enterprises’ innovationimpetus came mainly from the enterprises themselves.Finally, based on the above analysis, we put forward some suggestions:at presentstage China should further strengthen innovation investment to the state-ownedenterprises. Government fund flowing more to stated-owned enterprises rather thannon-stated enterprises can better and more effectively utilize government’s innovationresources. Meanwhile, government should pay more attention to analyze the reason whystated-owned enterprises is lack of innovation impetus and promote them to become themain body of independent innovation. For foreign-funded enterprises and privateenterprises in the non-state-owned enterprises, researcher need to conduct furtheranalysis in order to make better use of limited government funds, optimizing theallocation of resources.